CH 4.
________ is a key industrial marketing strategy in bidding to build large-scale industrial products such as dams, pipelines, etc.A) Systems contractingB) Systems buying C) Systems selling D) Solutions buying E) Turnkey logistics
Systems selling
"Toughies" are old school buyers who pit sellers against one another.
TRUE
A prime contractor provides a turnkey solution, so-called because the buyer only has to turn one key to get the job done.
TRUE
Business buyers often select suppliers who also buy from them.
TRUE
Corporate credibility depends on corporate expertise, corporate trustworthiness, and corporate likability.
TRUE
Framing occurs when customers are given a perspective or point of view that allows the firm to "put its best foot forward."
TRUE
Given the highly competitive nature of business-to-business markets, the biggest enemy to marketers here is commoditization.
TRUE
In the buying center, several people can occupy a given role such as user or influencer, and one person may play multiple roles.
TRUE
Influencers influence the buying decision by helping define specifications and providing information for evaluating alternatives.
TRUE
On spot electronic markets, prices of products or commodities change by the minute.
TRUE
Organizational buying is the decision-making process by which formal organizations establish the need for purchased products and services and identify, evaluate, and choose among alternative brands and suppliers.
TRUE
Sellers benefit from systems contracting through lower operating costs as a result of steady demand and reduced paperwork.
TRUE
Systems selling is a key industrial marketing strategy in bidding to build large-scale industrial projects such as dams or pipelines.
TRUE
The total demand for many business goods and services is inelastic; that is, not greatly affected by price changes.
TRUE
n the straight rebuy, "out-suppliers" try to get a small order and then enlarge their purchase share over time.
TRUE
The business buyer makes the fewest decisions in the straight rebuy situation and the most in the new-task situation.
TRYE
Timken achieved record revenue despite a recession by ________.A) shifting attention into heavy processing, aerospace and defense industriesB) shifting attention into the auto industryC) lowering prices on bearings for a tractor manufacturer's medium-sized tractors D) avoiding sales of high priced bearings for large tractorsE) all of the aboveAnswer: A
A
The ________ market consists of all the organizations that acquire goods and services used in the production of other products or services that are sold, rented, or supplied to others.A) businessB) consumer C) e-commerce D) globalE) domestic
A) Business
Patrick J. Robinson and his associates have identified eight stages in the business buying- decision process. This model is called the ________ framework.A) buygridB) buying/selling C) seller-centered D) commercial E) buy-analysis
A) Buygrid
Shoe manufacturers are not going to buy much more leather if the price of leather falls, nor will they buy much less leather if the price rises, unless they can find satisfactory substitutes. This is an example of ________.A) inelastic demand B) direct purchasingC) the acceleration effectD) a modified rebuyE) a straight rebuy
A) Inelastic demand
Business buyers may get new ideas at a trade show, see an ad, or receive a call from a sales representative who offers a better product or a lower price compared to the current in-supplier. These situations motivate the ________ stage.A) problem recognition B) general need descriptionC) order-routine specificationD) supplier searchE) performance review
A) Problem recognition
A ________ plan establishes a long-term relationship in which the supplier promises to resupply the buyer as needed, at agreed-upon prices, over a specified period of time.A) stockless purchaseB) direct stock purchase C) defined contribution D) stock purchaseE) share purchase
A) stockless purchase
The purchasing department buys office supplies on a routine basis from a pre-approved list of suppliers. This type of purchase is classified as a ________.A) straight rebuyB) modified rebuy C) new taskD) secondary purchaseE) procure-to-pay
A) straight rebuy
_______ is composed of all parties who participate in the purchasing decision-making process and share common goals and risks associated with their decisions.A) The buying centerB) The marketing sales team C) Strategic management D) Engineering support E) The logistics center
A) the buying center
Business marketers can stimulate problem recognition by ________. A) ensuring a presence in trade directoriesB) direct mail, telemarketing, and calling on prospectsC) encouraging the Better Business Bureau to release statistics D) using consumer advertisingE) conducting surveys of existing customers
B
If you were an upper-level marketing executive of a large seller of trucks, which of the following strategies would be most appropriate in reaching buying center targets?A) Concentrate on key buying influencers.B) Use multilevel in-depth selling. C) Use trade-based promotions.D) Concentrate sales efforts on the support staff.E) Move all operations to the Internet.
B( use multi-level in-depth selling
In the purchasing decision process, the major role of ________ is in selecting vendors and negotiating.A) gatekeepersB) buyers C) initiators D) approvers E) deciders
B) Buyers
What is the name of the database that is used to collect, validate, store, and disseminate data in support of government agency acquisitions?A) General Services Administration databaseB) Central Contractor Registration database C) Customer Value Assessment database D) Vendor-Managed Inventory database E) Proposal Solicitation database
B) Central Contractor Registration database
Which of the following relationships is characterized by much trust and commitment leading to a true partnership?A) mutually adaptiveB) collaborative C) basic buying and selling D) customer supplyE) cooperative systems
B) Collaborative
The demand for business goods is ultimately derived from the demand for ________. A) raw materialsB) consumer goodsC) services D) business solutions E) e-commerce
B) Consumer goods
In most countries, ________ are the major buyers of goods and services. They typically require suppliers to submit bids and often award the contract to the lowest bidder.A) consumer packaged-goods companiesB) government organizations C) health services vendors D) educational institutions E) households
B) Government orgs
In the purchasing decision process, the ________ are those who request that something be purchased. They may be users or others in the organization.A) usersB) initiators C) influencers D) deciders E) approvers
B) Initiators
________ refers to the decision-making process by which formal organizations establish the need for purchased products and services and identify, evaluate, and choose among alternative brands and suppliers.A) Marketing channels B) Organizational buying C) Corporate retailingD) Brand auditingE) Inventory control
B) Organizational buying
The approach to cost reduction that studies whether components can be redesigned or standardized or made by cheaper methods of production without adversely impacting product performance is termed as ________.A) maintenance, repair, and operating (MRO) B) product value analysis (PVA)C) vendor managed inventories (VMI)D) supplier performance management (SPM)E) supplier added value effort (SAVE)
B) Product value analysis
With respect to e-procurement, which of the two types of e-hubs are Web sites organized around?A) vertical and horizontal hubsB) vertical and functional hubs C) functional hubs and organizational hubs D) supplier and user hubsE) manufacturer and supplier hubs
B) Vertical and functional hubs
Pittsburgh-based Consol Energy's coal business largely depends on orders from utilities and steel companies which, in turn, depend on broader economic demand from consumers for electricity and steel-based products like automobiles and appliances because of ________.A) fluctuating demand B) derived demandC) professional purchasingD) multiple buying influencesE) multiple sales calls
B) derived demand
Many business buyers prefer to buy a total solution to a problem from one seller. This process is also known as ________.A) channel consolidationB) systems buying C) vertical buyingD) horizontal buyingE) supply buying
B) systems buying
Praxair Limited is a supplier of synthetic graphite to a number of electrode manufacturers in the United States. Its customers have shifted their ordering responsibilities to Praxair and the company regularly monitors its customers' inventory levels and has taken responsibility for replenishing the supplies automatically through continuous replenishment programs. Which of the following systems do Praxair and its customers follow with respect to order-routine specification? A) Supplier Added Value Effort ($AVE)B) Vendor Managed Inventory (VMI)C) Direct Concentrated Buying (DCB)D) Supplier Performance Management (SPM) E) Product Value Analysis (PVA)
B) vendor managed inventory
How can a marketer overcome the negative effects of commoditization?A) convince target consumers that the firm's products are as good as those of competitorsB) convince target consumers that price is irrelevant in determining qualityC) convince target consumers that the firm's products are different from those of competitors D) convince target customers that buying the highest-priced product is no guarantee of quality E) convince target customers that all the products in the market are equivalent
C
In which of the following is a person performing the role of an influencer?A) Dan decides on the product requirements and makes the final choice of suppliers.B) Luke has the authority to pick out the supplier and negotiate the terms of purchase.C) Liam heads the Tech team at LKG and provides information for evaluating the possible alternatives.D) LKG gets many calls from potential suppliers, and it is Leah's job to weed out the good prospects and refer them to others in LKG.E) Dana authorizes the actions of the deciders and buyers in LKG.Answer: C
C
Which of the following is a challenge in which business marketers differ from consumer marketers?A) understanding deep customer needs in new waysB) identifying new opportunities for organic business growth C) geographically concentrated buyersD) calculating better marketing performance and accountability metrics E) competing and growing in global markets, particularly China
C
Which of the following is true about industrial buying decisions? A) They are purely rational.B) They are purely emotional.C) They service both the organization's and the individual's needs. D) Top executives are never insecure about buying products. E) Individual needs legitimate the buying process and its outcomes.
C
Which of the following is true for business marketers?A) They deal with more and larger buyers than consumer marketers. B) They deal with more and smaller buyers than consumer marketers. C) They deal with fewer and larger buyers than consumer marketers. D) They deal with fewer and smaller buyers than consumer marketers. E) They deal with the same kind of buyers as consumer marketers.
C
Which of the following methods is most likely to be used by buyers to review the performance of chosen suppliers?A) The buyer may contact different suppliers and ask for their evaluations.B) The buyers may rate the end-users on several criteria using a weighted-score method.C) The buyer might aggregate the cost of poor performance to come up with adjusted costs of purchase, including price. D) The buyers may aggregate the opinions of various competitors and come up with the adjusted cost of supply.E) The buyers might adopt the Supplier Added Value Effort technique to calculate supplier efficiency.
C
alue Central has a partnership of high trust and commitment with certain suppliers and gives them access to its sophisticated and detailed daily, individual store-based sales data. In exchange, those suppliers are responsible for managing Value Central's inventory of their products. This relationship is best described as ________. A) basic buying and selling B) contractual transaction C) collaborativeD) customer supply E) customer is king
C) Collaborative
________ occurs when customers are given a perspective or point of view that allows the firm to "put its best foot forward."A) GatekeepingB) Commoditization C) Framing D) Rebuying E) Bartering
C) Framing
Which of the following is a form of cheating or undersupply relative to an implicit or explicit contract which usually takes place when buyers cannot easily monitor supplier performance?A) institutional sale B) business buyingC) opportunismD) vertical integrationE) contractual transactionism
C) Opportunism
Which of the following companies used the slogan, "The Power to Know®" to connect with C-level executives in the largest companies?A) Lincoln ElectricB) NetApp C) SASD) MedlineE) Plexco
C) SAS
Newer, more strategically oriented purchasing departments have a mission. Which of the following most accurately describes that mission?A) Make the most profit possible and remain independent of entanglements.B) Approach every purchasing opportunity as means to create interdependency. C) Seek the best value from fewer and better suppliers.D) Outsource the supply function.E) Abandon all strategies except for systems selling and buying.
C) Seek the best value from fewer and better suppliers
________ investments are those expenditures tailored to a particular company and value chain partner.A) DiversifiedB) Pooled C) Specific D) Umbrella E) General
C) Specific
The business buyer has to make the fewest decisions when involved in a ________. A) modified rebuyB) regular buyC) straight rebuy D) new rebuy E) new task
C) Straight rebuy
erox offers a ________ approach to prospective clients when it offers a complete turnkey solution, including the operation and management of the client's information and communication need.A) guided selling B) fair tradingC) systems buyingD) cross-sellingE) local purchasing
C) Systems buying
When purchasing disposable surgical gowns, Mercy Hospital's vice president of purchasing analyzes whether the hospital should buy disposable gowns or reusable gowns. If the findings favor disposable gowns, then the operating-room administrator compares various competitors' products and prices and makes a choice. Surgeons influence the decision retroactively by reporting their satisfaction with the particular brand. In this situation, the surgeons perform the role of the ________. A) deciderB) initiator C) userD) gatekeeper E) buyer
C) User
Sometimes a rise of only 10 percent in consumer demand can cause as much as a 200 percent rise in business demand for products for the next period. This is an example of ________.A) inelastic demandB) direct purchasing C) fluctuating demand D) derived demandE) a straight rebuy
C) fluctuation demand
A given percentage increase in consumer demand can lead to a larger percentage increase in the demand for plant and equipment necessary to produce the additional output. Economists refer to this as ________.A) derived demand B) inelastic demandC) the acceleration effectD) a straight rebuyE) the sales cycle
C) the acceleration effect
In which of the following is a person performing the role of an approver?A) Dan decides on the product requirements and makes the final choice of suppliers.B) Luke has the authority to pick out the supplier and negotiate the terms of purchase.C) Liam heads the Tech team at LKG and provides information for evaluating the possible alternatives.D) LKG gets many calls from potential suppliers, and it is Leah's job to weed out the good prospects and refer them to others in LKG.E) Dana authorizes the actions of the deciders and buyers in LKG
D
Which of the following is an example of a functional hub?A) Plastics.com allows plastics buyers to search the best prices among thousands of plastics sellers.B) ChemConnect.com is an online exchange for buyers and sellers of bulk chemicals.C) SteelMart.com concentrates on steel buyers from the United States.D) SupplyLink.com offers manufacturers from different industries information on ensuring workplace safety.E) PaperTiger.com offers paper buyers a comprehensive look at the prices and quality in the paper market.
D
Which of the following is true about the buying center?A) In a buying center, one person cannot play more than one role.B) A typical buying center has a maximum of five or six members.C) A buying center consists of only mid-level managers and below.D) It is the decision-making unit of a buying organization.E) Gatekeepers in a buying center are people who authorize the proposed actions of deciders or buyers.
D
With respect to e-procurement, Acosta, Ahold, Best Buy, Carrefour, Family Dollar Stores, and several other companies joined forces to form a ________ called 1SYNC to use their combined leverage to obtain lower prices for raw materials.A) manufacturer's co-op B) supplier's co-opC) middleman groupD) buying allianceE) buying cabal
D) Buying alliance
A ________ relationship is a cooperative one where the seller adapts to meet the customers' needs without expecting much adaptation or change in exchange.A) customer supplyB) cooperative system C) bare bonesD) customer is kingE) collaborative
D) Customer is king
In the ________ category of buyer-supplier relationships, competition rather than cooperation is the dominant form of governance.A) basic buying and sellingB) bare bones C) contractual transaction D) customer supplyE) collaborative
D) Customer supply
When purchasing disposable surgical gowns, Mercy Hospital's vice president of purchasing analyzes whether the hospital should buy disposable gowns or reusable gowns. If the findings favor disposable gowns, then the operating-room administrator compares various competitors' products and prices and makes a choice. Surgeons influence the decision retroactively by reporting their satisfaction with the particular brand. In this situation, the operating-room administrator performs the role of the ________. A) gatekeeper B) initiator C) userD) decider E) influencer
D) Decider
If you performed the role of the ________ in a buying center, you would be the person that has the power to prevent sellers or information from reaching other members of the buying center.A) initiator B) influencer C) deciderD) gatekeeper E) approver
D) Gatekeeper
In the purchasing decision process, the ________ are those who have the power to prevent sellers or information from reaching members of the buying center.A) approversB) buyers C) initiatorsD) gatekeepersE) deciders
D) Gatekeepers
In a ________ purchasing situation, the buyer wants to make some change to existing product specifications, prices, delivery requirements, or other terms.A) new rebuyB) regular buy C) straight rebuy D) modified rebuy E) new task
D) Modified rebuy
On an online ________, prices change by the minute. A) buying allianceB) barter marketC) systems seller D) spot market E) catalog site
D) Spot Market
Plastics.com allows plastics buyers to search the best prices among thousands of plastics sellers. Plastics.com is an example of a(n) ________.A) buying allianceB) barter market C) systems seller D) vertical market E) auction site
D) Vertical market
In which of the following is a person performing the role of an approver?A) Dan decides on the product requirements and makes the final choice of suppliers.B) Luke has the authority to pick out the supplier and negotiate the terms of purchase.C) Liam heads the Tech team at LKG and provides information for evaluating the possible alternatives.D) LKG gets many calls from potential suppliers, and it is Leah's job to weed out the good prospects and refer them to others in LKG.E) Dana authorizes the actions of the deciders and buyers in LKG
E
Which of the following is true about buying centers? A) One person may play multiple roles.B) Several people can occupy the same role.C) A buying center typically has five or six members. D) A buying center can have dozens of members. E) All of the above are true.
E
According to Webster and Wind, businesspeople are buying ________. A) productsB) solutions to the organization's economic and strategic problemC) solutions to their own need for achievement and reward D) A & C E) B & C
E) B& C
The ________ market consists of schools, hospitals, nursing homes, prisons, and other institutions that must provide goods and services to people in their care.A) verticalB) nonprofit C) spotD) secondary businessE) institutional
E) Institutional
Kenilworth Inc. is shifting from its rented four-room office to a standalone office building owned by the company itself. This can be classified as a ________.A) modified rebuyB) regular buy C) straight rebuy D) new rebuyE) new task
E) New task
In reordering office supplies, the only stages that the buyer passes through are the product specification stage and the ________ stage.A) problem recognitionB) general need description C) order-routine specification D) supplier searchE) performance review
E) Performance REview
If Ampex Support Systems is the single supplier for a local manufacturing company's MRO (maintenance, repair, operating) supplies and needs, Ampex Support Systems is considered as providing ________ for the manufacturer.A) guided selling B) purchasing support C) turnkey logistics D) decision supportE) systems contracting
E) Systems contracting
) In the business market, small sellers concentrate on reaching as many participants as possible because their chances of success are slim.
FALSE
A performance review is the first step in the buygrid framework.
FALSE
An increase in the demand for plant and equipment can lead to a much larger increase in consumer demand. This is known as the acceleration effect.
FALSE
Commoditization strengthens customer loyalty.
FALSE
Contracts are always sufficient to govern supplier transactions and prevent supplier opportunism.
FALSE
Most business buyers reject what is called systems buying from one seller.
FALSE
Most performance reviews are conducted by outside auditing agencies to avoid bias and internal discrepancies.
FALSE
Small sellers concentrate on multilevel in-depth selling instead of reaching the key buying influencers.
FALSE
The buying center is where consumers go to purchase their goods and services.
FALSE
The buying process begins when someone places an order with a sales representative.
FALSE
With respect to the buying center, approvers are people who have the power to prevent sellers or information from reaching members of the buying center.
FALSE
Product value analysis is an approach to efficiency that studies whether components can be redesigned or made by more efficient methods of production without adversely impacting product performance.
FALSE (is is an approach to cost reduction)
In buying alliances, participants offer to trade goods or services.
FALSE (they tend to buy goods together to reduce costs)
Small sellers should first concentrate their marketing efforts on reaching ________.
Influencers
